Spending on datacenter hardware will reach US$98.9 billion this year, with storage as the main driver of growth, according to a new forecast.

Gartner reported Thursday that global expenditure on datacenter hardware in 2011 is expected to be an increase of 12.7 percent over 2010's US$87.8 billion. Datacenter hardware covers servers, storage and enterprise datacenter networking equipment, said the research firm.

Jon Hardcastle, research director at Gartner, noted in a statement that worldwide spending in datacenter equipment will "finally reach and surpass 2008 levels". In the report, he noted that growth in emerging regions, especially in BRIC countries Brazil, Russia, India and China, is set to make up for continued weakness in Japan and Western Europe, compared to pre-downturn levels.

Spending in storage will boost this year's datacenter hardware purchases. Hardcastle explained that while spending on storage represented only a quarter of total hardware expenditure for data centers, almost half of the growth in spending will be from the storage market.

According to Hardcastle, traditional on-premise data centers are under attack from "three sides". "Firstly, virtualization technologies are helping companies to utilize their infrastructure more effectively, inhibiting overall system growth," he said.

"Secondly, data centers are getting more efficient, leading to higher system deployment densities and inhibiting demand for floor space," he added. "Thirdly, the move to consolidated third-party data centers is reducing the overall number of midsize data centers."

While midsize data centers will face the crunch, Hardcastle noted that the largest data center class will benefit from the rise of cloud computing.

Gartner reported that giant data centers, defined as those with more than 500 racks of equipment, are set to increase spending--accounting for 26 percent of total expenditure in 2015, from 20 percent in 2010. Spending by such large facilities will be driven by the cloud and the shift from internal datacenter provision to external, it said.